Archive for January, 2015

Which is it? Does the United States need to increase its spending on education?

On one side, economist Eric Hanushek and others have argued that decisions to increase education spending were simply “throwing money at schools.”

… His research found that there was little correlation between how much schools spent and how well their students performed on tests.

But wait, a new study shows more money does improve student outcomes.

More recent research, however, has found that when schools have more money, they are able to give their students a better education. A new study on those who went to school during the school-finance cases a few decades ago found that those who attended districts that were affected by the rulings were more likely to stay in school through high school and college and are making more money today.

The authors, Kirabo Jackson and Claudia Persico of Northwestern University and Rucker Johnson of the University of California, Berkeley, released a revised draft of their as-yet-unpublished paper this week. The benefits were most obvious for students from poor families. They found that a 10 percent increase in the money available for each low-income student resulted in a 9.5 percent increase in students’ earnings as adults. A public investment in schools, they wrote, returned 8.9 percent annually for a typical pupil who started kindergarten in 1980.

The findings are evidence that public schooling can be a way for children who grow up in poverty to overcome their circumstances, Johnson argued.

“Those increases in instructional expenditures proved to have large dividends, significant economic returns, in the lives of these children,” he said. “We’re always searching for what can break that cycle of poverty from one generation to the next.”

The common opinion among everyone participating in this debate is that it is not the amount of spending, but the way the money is allocated.

Still, the authors don’t advocate simply throwing money at the problem of education, either. “Money matters, but it matters how it’s spent,” said Jackson of Northwestern.

Megan McArdle makes a similar point in how to address failing schools.

Should we fix the issues with those schools? Absolutely — and doing so might mean spending more money. But that doesn’t mean that we need to increase the overall level of educational funding. It means that we need to identify ways to improve those underperforming schools, then find out how much more it would cost to implement those programs. It is just as likely that improvements will come from changing methods and reallocating resources as that they will require us to pour more money into failing institutions.

Even Governor Andrew Cuomo of New York, long viewed as a stalwart liberal, agrees on this matter.

It’s a view still held by many politicians today, including Gov. Andrew Cuomo (D-N.Y.). “We spend more than any other state in the country,”he said a year ago. “It ain’t about the money. It’s about how you spend it — and the results.”

January 26-31 is National School Choice Week, and supporters believe there is much to celebrate.

… There are more than 50 such school choice programs — including school vouchers and tax-credit scholarship programs — in 25 states serving more than 300,000 children. Furthermore, about half of these programs were enacted in the past five years, which indicates that momentum for school choice is rapidly accelerating.

School choice is shaking up the public education establishment, but it would be wrong to say that it’s a new, or even radical, idea. After all, if you are the child of middle- or upper-class parents, then it is almost certain that you benefited from school choice. Perhaps your parents chose where to buy a home based on the quality of the local public school. Or perhaps they paid to send you to a private school. In any event, the reason you got a quality education is because your parents were able to afford choices that put you in a school, public or private, that they determined best suited your needs. Your educational fate was not determined solely by the ZIP code into which you were born.

The present battle is being fought mainly for lower-income families, against teachers’ unions and their allies.

… In recent years, they have challenged school-choice programs in Arizona, Indiana and New Hampshire — where they’ve suffered decisive losses — and Alabama, Colorado, Georgia, Florida and North Carolina — where their lawsuits are ongoing, but have suffered big setbacks. (They prevailed in Louisiana, but the state legislature quickly undid their victory.) When more states pass school-choice programs, the unions will no doubt file more lawsuits.

Bert Gall, an Institute for Justice attorney who is at the heart of the battle, is optimistic.

… the unions’ legal onslaught is not a sign of strength, but of desperation. Their lawsuits are often a collection of weak legal claims that are thrown against the wall in the hope that one will stick. While the unions may win the occasional skirmish, they will ultimately lose the legal battle — with the result that school-choice programs will expand to serve more and more families.

… Less than a quarter of minimum wage workers live at or below the poverty line, while two-thirds come from families above 150 percent of the poverty line. In fact, the average family income of a minimum wage worker exceeds $53,000 a year.

President Obama continues to advocate for raising the federal minimum wage, and Oregon is currently engaged in a debate to raise it at the state level.

Generally speaking, internships are important in securing employmentafter graduation. But unpaid internshipsseem to offer minimal benefits in that regard, and other factors must be considered in assessing the value of getting work experience during college. Variations by industry are important, as well as by the types of job duties.

The National Association of Colleges and Employers (NACE) reported that last year theoverall conversion rate was 51%. Considering anecdotal information about the popularity of unpaid internships, this is hard to believe. NACE’s numbers come from surveying their own members, which I suspect are self-selected to skew toward more positive results.

… today’s rich increasingly pass on to their children an asset that cannot be frittered away in a few nights at a casino. It is far more useful than wealth, and invulnerable to inheritance tax. It is brains.

Intellectual capital drives the knowledge economy, so those who have lots of it get a fat slice of the pie. And it is increasingly heritable. Far more than in previous generations, clever, successful men marry clever, successful women. Such “assortative mating” increases inequality by 25%, by one estimate, since two-degree households typically enjoy two large incomes. Power couples conceive bright children and bring them up in stable homes—only 9% of college-educated mothers who give birth each year are unmarried, compared with 61% of high-school dropouts. They stimulate them relentlessly: children of professionals hear 32m more words by the age of four than those of parents on welfare. They move to pricey neighbourhoods with good schools, spend a packet on flute lessons and pull strings to get junior into a top-notch college.

Yes, all this is true. But how to address the issue of income inequality? Thankfully, the author agrees the “solution is not to discourage rich people from investing in their children”. But he does have other ideas.

Improve early childcare for poor children.

Move primary control of public school funding from local to state level, and tilt it to favor poor students. Expand school choice.

Change college admission so it is based “solely on academic merit”, and force schools to be more transparent about the financial “return that graduates earn on their degrees”.

Even if these recommended reforms could be magically imposed, I question whether much would change. Head Start doesn’t work in improving long-term outcomes, and I’m skeptical about the chance for reforming such a massive government program. State funding of public education would be an improvement, but wealthy parents would always find ways to make sure their own children got a better deal. School choice would at least offer motivated low-income families better options. I like the idea of academic merit becoming the primary determinant for college admission, but that in itself would do little to mitigate the effects of inadequate K-12 education.

… Edu-speak—the incomprehensible babble used to describe what are often relatively straightforward teaching methods, learning styles, and classroom designs—is plaguing the country’s schools. Intended to help people understand education reform, edu-speak often ends up doing the exact opposite: It muddles those reform strategies and, left unchecked, it could end up making positive change a lot more difficult to achieve. As Liz Willen, the editor of The Hechinger Report, wrote in 2013, it all adds up to a “communication breakdown that hampers education reform.” Just like its cousins in the corporate or legal worlds—synergy! Ex parte!—such jargon only adds confusion to already-confusing things.

Everyone from parents to journalists get caught up in trying to understand the bewildering language used by “educrats”.

Parents get status reports on their kids and are baffled as to what half of the words mean. Teachers are ordered to alter their instruction but left unsure of what they’re actually being ordered to do. Kids are told to take random tests with weird names and remain unconvinced they’re doing anything productive. Journalists like me transcribe soliloquies at school board meetings and legislative hearings, dreading all the translation that we’ll have to do later.

During the first few years of my children’s public school experience, I was often perplexed by terminology used by teachers and administrators. At first I thought I was the only parent not in the know, but later I realized many parents were in the same boat as I was. Soon enough I learned that the lovely sounding “enrichment action-items” consisted mainly of mundane arts and crafts activities that almost always made sure to include some type of politically correct message. “Differentiated instruction” meant that my kids sat around in groups shooting the breeze and wasting time while waiting for the teacher to teach. And the goal of “life-long learning” seemed to be an excuse for producing high school graduates with significant gaps in what they should have learned in their K-12 experience.

The headline is wrong, even though Layton gets the facts pretty much right: 51 percent of kids are eligible for free or reduced-price lunches, which are available only to low-income families. That’s an important story. But participation in the federal lunch program is, as she notes, only a rough proxy for poverty: you qualify if you have a family income less than 185 percent of the poverty line. For a family of four this comes to about $44,000, which certainly qualifies as working class or lower middle class, but not poverty stricken.

School lunch programs do not accurately measure poverty, and poverty rates have not changed much over the long term.

But wait! It’s even more complicated than that—and this part is important. On the one hand, lots of poor kids, especially in the upper grades, don’t participate in school lunch programs even though they qualify. They just don’t want to eat in the cafeteria. So there’s always been a bit of undercounting of those eligible. On the other hand, a new program called the Community Eligibility Provision, enacted a couple of years ago, allows certain school districts to offer free meals to everyone without any proof of income. Currently, more than 2,000 school districts enrolling 6 million students are eligible, and the number is growing quickly. For example, every single child in the Milwaukee Public School system is eligible. Overall, then, although the official numbers have long undercounted some kids, CEP means they now increasingly overcount others. Put this together, and participation in the school lunch program becomes an even rougher proxy for poverty than it used to be—and any recent “explosion” in the student lunch numbers needs to be taken with a serious grain of salt. This is especially true since overall child poverty hasn’t really changed much over the past three decades, and if you use measures that include safety net programs it’s actually gone down modestly since the end of the Reagan era.

Obviously poverty is a serious problem that should not be ignored, and the causes are probably complex. But inaccurate reporting does not help in finding solutions.

It’s certainly worthwhile discussing why poverty has increased. The economy is one possible reason as are issues to do with family formation and marriage rates. Another possibility is immigration. A higher poverty rate caused by the immigration of more low-income children is compatible with everyone becoming better off over time and not necessarily a bad thing. Those are just a few possible topics worthy of investigation. I don’t claim that any of them are correct.

I do claim, however, that we won’t get very far understanding the issue by shifting definitions and muddying the waters with misleading but attention grabbing statistics.

———

Kevin Drum, “Half of All Public School Kids in Poverty? Be Careful.”, Mother Jones, Jan. 17, 2015.

Lyndsey Layton, “Majority of U.S. public school students are in poverty”, Washington Post, Jan. 16, 2015.

Alex Tabarrok, “No, A Majority of US Public School Students are Not In Poverty”, Marginal Revolution, Jan. 17, 2015.

… It asked graduates how they were doing across five different metrics, including financially, physically and socially. Eleven percent of graduates of public universities and private universities said they were “thriving” across all five. Twelve percent of graduates of U.S. News & World Report’s top 100 schools were thriving, essentially the same as the rest.

But student loans can cripple well-being.

The biggest predictor of whether a graduate wasn’t thriving was whether he or she had student loans. Fourteen percent of those without any debt said they were thriving, compared to 2 percent of those with more than $40,000 of debt. You can’t draw iron-clad conclusions from that, but those figures should be worrisome all the same for anyone thinking about taking on student loans.

Takeaway lessons: Going into debt to attend your “dream” school may be detrimental to your well-being. Private school may not be worth the extra money.

ADDED:

These are the five elements of well-being that were measured in the Gallup survey:

Purpose Well-Being: Liking what you do each day and being motivated to achieve your goals

Social Well-Being: Having strong and supportive relationships and love in your life

One of the slow-rolling and under-reported government debacles is the rising amount of student-loan debt that is guaranteed by taxpayers and will never be repaid. Thanks to the federal takeover of the student-loan market in 2010, the Education Department now stands behind more than $1 trillion in outstanding debt. Less well known is how the same federal government that has promoted and subsidized this debt is also scheming to make sure it doesn’t have to be repaid.

Income-based repayment programs are one way for borrowers to shift responsibility over to taxpayers.

So-called income-based repayment programs reduce a borrower’s monthly payments and then forgive the remaining principal after a period of years. Graduates who choose the nonprofit and government jobs favored by the President can have their loans forgiven entirely after 10 years.

The Obama administration greatly expanded benefits under income-based repayment plans in recent years and has launched efforts to promote them. Enrollments are growing rapidly and now stand at an all-time high. Some 24% of Federal Direct Loan Program balances ($115 billion) that have come due are enrolled in the two most generous plans, Income-Based Repayment and Pay As You Earn. That is up from 14% a little more than a year ago. The number of borrowers using the plans has doubled over that time, to 2.2 million.

At the same time, default rates are trending upward. This at a time when the economy is supposedly improving.

Student loans are promoted for everyone, regardless of qualifications. And loans are being made easier “not to repay”.

This all makes sense, however, when you realize that the student-loan program has been designed to achieve two political goals: Loans should be available to any student, at any school, pursuing any credential; and student debt is bad and burdensome, so it should be easy for borrowers not to repay.

Based on these goals, the program is performing quite well for students and the institutions whose coffers swell under such loose lending standards. Loan issuance has grown rapidly in recent years while repayment rates have declined steadily. From the perspective of the taxpayers who must ultimately finance these liabilities, however, the federal student-loan program is performing badly and steadily getting worse.

Use and availability of income-based repayment (IBR) schemes, which set repayment expectations at a set percentage of the student borrower’s post-college income, will dramatically increase in 2015. This is because policymakers have narrowly defined the student debt problem as a problem of student borrowers struggling to keep up with payments (i.e., avoid default). Therefore, setting payments at a more affordable level would seem to resolve the problems student debt creates….

William Elliott III
Founding Director of the Assets and Education Initiative at the University of Kansas, School of Social Welfare and an expert on student debt

Students and parents often find the Free Application for Federal Student Aid (FAFSA) to be a little intimidating. The form asks more than 100 questions about family finances and demographic details. The FAFSA is slightly more complicated than the typical federal income tax return. Officially, the form should take less than an hour to complete, but most parents don’t have advanced degrees in economics. Some parents want help completing the FAFSA, because they worry that making a mistake on the FAFSA will affect their ability to pay for college, ruining their child’s life forever.